As a business owner, only you are truly aware of the hardships and toil that have gone into making it what it is today. While no one can really put a price on the emotions and sacrifices involved in starting your turnkey business, by selling it you must be hoping to get the best possible returns for it. You’re in luck here, as turnkey businesses are far more appealing to buyers and investors. This is because all the hard work involved in moving it up through the various stages has already been done, by you. Turnkey businesses like yours, are ready to be acquired and start providing a return on investment from the very outset. If you are looking to sell your turkey business, then here are a few handy tips to keep in mind for securing the best price for it.
Stock Taking
While the term, literally, talks about taking an inventory count, we use the term here more figuratively. In this step, you must take into account all your tangibles and intangibles. This includes the sellable inventory along with all the associated functions, processes and systems that go into running your operations. The spending on IT infrastructure, the work on your online store, payment system, security or regulatory certifications, contracts with existing vendors and suppliers, all form a part of this.
Financial Documentation
The next step is to bring together the documentation that reports the financial and operational health of your business. Naturally, potential buyers eye a turnkey business with the prospect of running it as-is and start collecting on the revenues as soon as they take it over. For this to happen, they need to see your business is in good shape. The verifiable proof of this lies in documents such as tax reports, P&L statements, historical revenues and sales figures, outstanding amounts payable and so on. The lower your debt, the lower the perceived risk, and the higher the selling price.
You can take one step further and not limit yourself to financial documentation alone. The health of a turnkey business also relies on its smooth function from order to delivery. There are several components involved within it. Having clearly articulated processes, standard operating procedures, and a well-defined overall catalog of clients and vendors will assure the buyers of their ability to run the business successfully under the new ownership. This will translate to you better returns on the sale.
Business Valuation
Before you actually get into any sales negotiations, you should firmly establish your selling price. There are several tangible contributors to this such as your current infrastructure, physical assets owned, monthly/annual sales minus overall expenses, etc. There are factors to be considered as well, such as your brand value, future projections, operational scalability, and so on. All these combined will help you arrive at a selling price for your turnkey business. If you are new to the selling process or anxious that you might undersell your business, there are several specialist firms who can carry this activity out for you.
Business Listing
Having completed all the aforementioned steps, you should be in a position to list your business for sale. While selling it privately to a competitor or someone in your professional network may be the most straightforward and direct way to do so, it can be a bit overwhelming, especially for those who are new to the process. There is always the option of utilizing the services of a broker or a professional agent who, at the cost of a fee or commission, will help you go through the different stages of selling.
While a turnkey business is sure to attract more potential buyers, it is a misconception that they are easy to sell. This is because, like in the case of any other business, there is an emotional quotient that is involved and complex negotiations that need to be conducted. It is only natural for the buyer to also strive to get the best bang for their buck. This is why the outcome of your business listing should be the establishment of a fair asking price as well as your own walk-away price. Anything offered lower than that may not be entertained.
In Summation
A turnkey business has gone through its evolution stage and has withstood the storms of the market. Its experience and resilience are two of the attributes that make it highly appealing. Also the fact that buyers are not expected to pump in more capital upon taking charge of the business, since it is fully functional and ready to generate returns from day 1.
Know more about how to sell your turnkey business, the mediums you can list it on, and the best practices to follow in order to get the best returns.
